RETAILERS such as Starbucks, Whole Foods,
and others are changing today’s retail development game by showcasing the power of customized stores. From Store #1 to Store #300
and beyond, these retailers convey a consistent
brand message while also creating a customer
experience that is relevant to the community.
Whole Foods, for example, doesn’t even have
a prototype store design. Every store in the
chain is designed to fit into the local market.
CEO John Mackey is leading the charge and
proving that retailers can make the transformation and still be successful.
Starbucks has enjoyed enormous success by turning the world’s
largest fleet of coffee shops into brand-centric neighborhood cafes.
In the process, the company has pioneered a movement that sends
a clear message to customers: “We are paying attention, and we
care about your patronage and your community.” From an operations perspective, the chain’s ability to leverage a kit of parts and
standard materials package to create destination locations has
turned mass implementation upside down.
And the chain has accomplished this without any financial damage. Chain-wide, Starbucks’ 2013 fourth-quarter performance
revenues were up 13 percent, global comp store sales were up
7 percent, and operating income was up 29 percent—capping off
the best year in the company’s 42-year history!
WHAT’S DRIVING THE LOCALIZATION TREND?
Without a doubt, customer and community expectations have
changed. Community building reviews and demands for exterior upgrades are now a primary focus of the approval process.
The message is clear: You can build cookie cutter stores elsewhere,
but not in my neighborhood.
With prime store locations in scarce supply and hot demand,
retailers are finding it more difficult to call all the shots on store
design. If Walmart and Target are being forced to adapt their store
concepts on a community level (and they are!), then no retailer is
exempt from local neighborhood pressure.
But don’t go local for this reason alone. Do it because it makes
great business sense. Competitively, localized store concepts are
nearly impossible for other retailers to track, let alone copy. And
the truth is that churning out look-alike stores just takes your
company another step along the dangerous path toward commod-itization, leading to slower growth and lower profitability.
WHAT’S HOLDING YOU BACK?
Unit economics is most likely the biggest deter-
rent, along with maintaining project schedules
and the common refrain, “We’ve always done it
So, how do you leverage your real estate
strategy with different store footprints? What
is the most cost-effective way to connect with
customers, neighborhood by neighborhood?
Can you keep each store unique and local, but
maintain the brand’s familiar environment and
remain within the store development budget?
How do you mix it up and create a unique store,
while still pulling from your standard kit of
parts? The answers to these challenges are not
as far off as you think.
TURNS OUT YOU CAN HAVE IT ALL
Here are just a few ways you can pay homage to
the neighborhood without breaking the bank:
• Develop an investment strategy based on location. Dedicate
a percentage of your fleet to community-based formats with the
remainder set aside for more cost-efficient locations.
• Use exterior or interior materials that reflect the community.
Add a highlight wall built from local stone or other locally sourced
material. Create a storefront that speaks to the local aesthetic, but
use your prototype palette and design inside the store.
• Focus on the customer touch points where you get the most
credit. Keep your kit of parts intact, but blend them with just
enough customization to make a local statement.
• Source a local artisan who creates custom pieces from local
materials—perhaps a table, display, wall finish, or special light
fixture. It might cost more but, if displayed prominently, it may be
all you need for the space to feel customized. Combine this with
standard furniture and fixtures and lay out the space in a unique
way to respond to regional shopping preferences.
• Reach out to local artists and provide a community art wall
where their work is on display. Or hire a local artist to design a
mural that captures the neighborhood’s personality.
• Consider using digital displays in windows or interiors as they
are infinitely customizable. Just be sure content management is
identified as a team member’s key responsibility.
Jamey Chinnock, PMP, is director of project management for Chute
Gerdeman, a strategic brand and design firm based in Columbus, Ohio.
Chinnock serves as a liaison between clients and the design team, coordinating and facilitating all the events, checkpoints, and creative development milestones that ensure a successful project. To receive a copy
of Chute Gerdeman’s latest Intelligence Report, “Design-Led Rollout,”
contact Whitney Kyle at email@example.com.
Go Local: Create
Breaking the Bank
JAMEY CHINNOCK, PMP
director of project